Ocugen, Inc. (OCGN) Earnings Call Transcript & Summary

Good morning, and welcome to Ocugen's Fourth Quarter and Full Year 2024 Financial Results and Business Update. Please note that this call is being recorded at this time. [Operator Instructions] I will now turn the call over to Tiffany Hamilton, Ocugen's Head of Corporate Communications. You may begin.

Thank you, operator, and good morning, everyone. Joining me on today's call and webcast is Dr. Shankar Musunuri, Ocugen's Chairman, CEO and Co-Founder, who will provide a business update and an overview of our clinical and operational progress; Ramesh Ramachandran, our Chief Accounting Officer, will provide more detail on our financial results; and Dr. Huma Qamar, Chief Medical Officer, will be available to answer questions following the presentation. This morning, we issued a press release detailing associated business and operational highlights for the fourth quarter and full year of 2024. We encourage listeners to review the press release, which is available on our website at ocugen.com. This call is being recorded and a replay with the accompanying slide presentation will be available on the Investors section of the Ocugen website for approximately 45 days. This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are subject to risks and uncertainties. We may, in some cases, use terms such as predicts, believes, potential, propose, continue, estimates, anticipates, expects, plans, intends, may, could, might, will, should or other words that convey uncertainty of future events or outcomes to identify these forward-looking statements. Such statements include, but are not limited to, statements regarding our preclinical and clinical development activities and related anticipated development time lines. Such statements are subject to numerous important factors, risks and uncertainties that may cause actual events or results to differ materially from our current expectations. These and other risks and uncertainties are more fully described in our periodic filings with the Securities and Exchange Commission, the SEC, including the risk factors described in the section entitled Risk Factors in the quarterly and annual reports that we file with the SEC. Any forward-looking statements that we make in this presentation speak only as of the date of this presentation, except as required by law. We assume no obligation to update forward-looking statements contained in this presentation, whether as a result of new information, future events or otherwise after the date of this presentation. Finally, Ocugen's annual report on Form 10-K covering 2024 will be filed today. I will now turn the call over to Dr. Musunuri.

Thank you, Tiffany, and thank you all for joining us today. We are eager to share the ongoing progress of our novel modifier gene therapy platform across all 3 clinical programs. It was especially exciting to announce last week that we reached an alignment with the FDA to move forward with a Phase II/III pivotal confirmatory trial for OCU410ST BLA targeting Stargardt disease, making it possible to potentially expedite our clinical development time line by 2 to 3 years, which is expected to save significant costs in addressing disease burden even sooner than anticipated. This important news also brings us closer to our goal of 3 potential BLAs in the next 3 years, OCU400 in 2026, OCU410ST in 2027 and OCU410 in 2028. We know this is a bold ambition, but I'm confident that we have the strategic and scientific expertise, along with an unrelenting commitment to patients to deliver on our commitment. During 2024, we continuously advanced our programs in line with enrollment and dosing time lines and are continuing to drive the product pipeline forward in 2025. Throughout development, we are providing data to validate our revolutionary platform. To support our efforts in the clinic, we secured $65 million in equity and debt financings in the second half of 2024 that extends cash runway into the first quarter of 2026. Let's discuss OCU400, our lead candidate in more detail. Retinitis Pigmentosa effects 300,000 people in the U.S. and EU combined, and 1.6 million globally, and these associated with mutations in more than 100 genes. With only one product on the market that addresses 1% to 2% of patient population, you can see the ability for OCU400 to meet a tremendous unmet medical need and potentially capture all the market share through its gene-agnostic mechanism of action. In February, the European Commission provided a positive opinion for the European Medicines Agencies, EMA committee for advanced therapies for OCU400; Advanced Therapy Medicinal Product, ATMP classification ATMP classification is granted to medicines that can offer groundbreaking opportunities for the treatment of disease and accelerates the regulatory review time line of this potential onetime gene therapy for life. Additionally, this classification allows Ocugen to interact with EMA more frequently for scientific advice and protocol assistance. In January, we announced positive 2-year safety and efficacy data from the OCU400 Phase I/II clinical trial that demonstrated clinically meaningful improvement of 2-line gain, 10 letters on the ETDRS chart in low luminescence visual equity, LLVA in treated eyes when compared to untreated fellow eyes. This treatment effect was statistically significant with a p-value of 0.005 in all subjects regardless of mutation at 2 years, demonstrating the long-term durability for OCU400. These 2-year LLVA findings which are the most sensitive measure of visual function are consistent with the results observed at 1 year. The Phase III study spanning 1 year will enroll 150 participants divided into 2 study arms, 75 participants with the row gene mutations and 75 participants who are gene agnostic. In each arm, participants will be randomized in a 2:1 ratio to receive either treatment which is 2.5x 10 to the 10 vgs per eye of OCU400 are remain in an untreated control group, respectively. We're actively enrolling patients in the U.S. and Canada in the Phase III liMeliGhT clinical trial of OCU400 and intend to complete enrollment in the first half of 2025 to remain on track to meet BLA and MAA filings targets mid-2026. Next up is OCU410ST. With no approved treatment options available for patients with Stargardt disease, 100,000 patients in the U.S. and Europe combined are desperate for an answer. OCU410ST with a single subretinal injection has potential to treat Stargardt in all ABCA4 associated retinopathies and in the fourth quarter, received orphan medicinal product designation from the EMA for the treatment of ABCA4 associated retinopathies. Earlier this week, we announced that OCU410ST also received ATMP classification along with OCU410, which is a critical step to potentially address the severely unmet medical needs in the very near future. 6-month data from Phase I of the OCU410ST GARDian trial demonstrated clinically meaningful 2-line 10-letter improvement in visual function measured by best corrected visual equity, BCVA, which is statistically significant with a p-value of 0.02 in treated eyes. 100% of evaluable treated eyes demonstrated stabilization or improvement in visual function. There was 52% slower atrophic lesion growth in OCU410ST treated eyes versus untreated fellow eyes after a single injection at 6 months in 7 patients and 103% slower atrophic lesion growth in treated eyes versus untreated fellow eyes at 12 months in 2 patients. OCU410ST maintains a favorable safety and tolerability profile with no serious adverse events, including no cases of estimate optic neuropathy, vasculitis, intraocular inflammation, endophthalmitis or choroidal neovascularization and no adverse events of special interest. The Phase II/III pivotal confirmatory trial of OCU410ST will randomize 51 subjects, 34 of whom will receive a single subretinal 200-microliter injection of OCU410ST at the concentration of 1.5x 10 to the 11 vector genomes vg per ml in the eye with the worst visual equity and 17 of whom will serve an untreated controls. The primary endpoint in the clinical trial is change in atrophic lesion size. The secondary endpoint include visual equity as measured by best corrected visual equity and LLVA compared to untreated controls. 1-year data will be utilized for the BLA filing. We plan to initiate the Phase II/III study mid-2025 and are targeting BLA submission by 2027. Now let's move on to our developments in OCU410, which is specifically designed to address multiple pathways implicated in the pathogenesis of dry age-related macular degeneration, dAMD, and offer a distinct advantage over current treatment options, a target only one pathway, a complement system. Currently, FDA-approved treatment options require frequent intravitreal injections, about 6 to 12 doses per year and are accompanied by various safety considerations. For example, roughly 12% of patients developed with macular degeneration, following treatment. It is also important to note there are no approved therapies for geographic atrophy, GA in Europe. OCU410 has the potential to regulate all 4 pathways related to disease progression, lipid metabolism, inflammation, oxidative stress and activation of the complement system, thereby addressing the underlying causes of this disease. Approximately 2 million to 3 million patients in U.S. and EU and 8 million patients globally suffer from GA, advanced form of dAMD. Preliminary 9-month data of OCU410 showed clinically meaningful 2-line or 10-letter improvement in visual function, LLVA in treated eyes compared to untreated eyes in the Phase I portion of the trial. Subjects showed considerably slower lesion growth, 44% from baseline in treated eyes versus untreated fellow eyes at 9 months and follow-up data from the Phase I study. Preservation of retinal tissue at 9 months at our GA lesions of treated eyes with a single injection of OCU410 in Phase I compared favorably to published data and a leading FDA-approved complement inhibitor given monthly or every other month at the same time points. In the Phase II study, the safety and efficacy of OCU410 in patients with GA secondary to dAMD will be assessed. 51 patients were randomized 1:1:1 into either of 2 treatment groups, medium or high dose or a control group. In the treatment group, subjects received a single subretinal 200-microliter administration of 5x 10 to the 10 vector genomes or vgs per ml, which is a medium dose, or 1.5x 10 to the 11 vgs per ml, high dose while the control group remained untreated. This week, the DSMB convened and reviewed the safety and tolerability profile of an additional 15 subjects from the Phase II portion of the study. No serious adverse events alluded to OCU410 have been reported to date in all 60 subjects, including Phase I. Unlike currently available treatments for GA, there were no cases of estimate optic neuropathy, vasculitis, intraocular inflammation, endophthalmitis or choroidal neovascularization and no adverse events of special interest. Interim clinical data from the ArMaDa clinical trial will be available in the second half of 2025. This data will help us design a future pivotal confirmatory Phase III study planned for 2026 and enable our potential BLA and MAA filings as soon as 2028. Given the multifunctional effect of our modified gene therapy, the profound unmet medical need, limited treatment options and the fact that it is designed as a one-and-done treatment, we believe OCU410 can be a potential gold standard for treating GA worldwide. Lastly, I would like to call attention to our biologic candidate and inhalation vaccines platform. OCU200 moved into the clinic and patients are currently being dosed in Phase I clinical trial for diabetic macular edema, DME. OCU200 has the potential to change the treatment landscape for DME, diabetic retinopathy, and with macular degeneration, wet AMD, with its unique mechanism of action, binding the active component from statin to integrin receptors that play a crucial role in disease pathogenesis and holds the promise to benefit all DMA patients, including the 30% to 40% of patients who do not respond to current anti-VEGF therapies. The OCU200 Phase I clinical trial is a multicenter, open-label dose escalation study versus drug safety via intravitreal injection in 3 cohorts: low dose, 0.025 milligram; medium dose, 0.05 milligrams; and high dose, 0.1 milligram. All subjects will receive a total of 2 intravitreal injections of OCU200 6 weeks apart. Patients follow-up will take place up to 3 months after the last injection. Approximately 12 million people in the United States, 130 million people worldwide are affected by DME, DR or wet AMD. The investigational new drug IND application for OCU400, the company's inhaled mucosal vaccine, or COVID-19, was cleared by the FDA. The National Institute of Allergy and Infectious Diseases, NIAID, part of the National Institute of Health is expected to sponsor and conduct the Phase I trial to assess the safety, tolerability and immunogenicity for OCU400 administered via 2 different routes, inhalation into the lungs and intranasally as a spray. The Phase I trial will enroll 80 adult subjects aged 18 to 64 years. 40 subjects will be assigned to the low-dose group and 40 subjects will be assigned to the high dose group. Within each group, 20 subjects will receive the inhalation form of the vaccine and the other 20 subjects will receive the intranasal form. The primary aim of the study is to determine safety, while secondary and exploratory endpoints include antibody production, systemic as well as mucosal and the number of breakthrough COVID-19 infections. OCU500 is based on a novel Chimpanzee adenovector CHAD-36 technology. Earlier clinical studies to prevent COVID-19 that employed a similar technology administered by emulation demonstrated increased mucosal and systemic antibodies and a durable immune response up to 1 year using 1/5 the dose compared to the same vaccine administered intramuscular. The Phase I clinical trial is anticipated to start in the second quarter of 2025. I'll now turn the call over to Ramesh Ramachandran to provide the financial update. Ramesh?

Thank you, Shankar, and good morning, everyone. I will now provide an overview of the key financial results of the fourth quarter and full year of 2024. Our research and development expenses for the quarter ended December 31, 2024, were $8.3 million compared to $7.8 million for the fourth quarter of 2023. For the full year ended December 31, 2024, Research and Development expenses were $32.1 million compared to $39.6 million for the year ended December 31, 2023. General and administrative expenses for the fourth quarter ended December 31, 2024, were $6.3 million compared to $5.2 million for the fourth quarter of 2023. General and administrative expenses for the year ended December 31, 2024, were $26.7 million compared to $32.0 million for the year ended December 31, 2023. Net loss was approximately $13.9 million or $0.05 net loss per share for the quarter ended December 31, 2024, compared to a net loss of approximately $11 million or $0.04 per share net loss for the fourth quarter 2023. Full year net loss was $54.1 million or $0.20 net loss per share compared to a net loss of $63.1 million for the full year 2023 or $0.26 net loss per share. Our cash and restricted cash totaled $58.8 million as of December 31, 2024, compared to $39.5 million as of year ended December 31, 2023. We expect that our cash and restricted cash will enable us to fund operations into the first quarter of 2026. As always, we are proactively exploring shareholder-friendly opportunities to increase our working capital, including partnerships that will drive long-term strategy for our scientific platforms. That concludes my update for the quarter. Tiffany, back to you.

Thank you, Ramesh. We will now open the call for questions. Operator?

[Operator Instructions] Our first question comes from the line of Michael Okunewitch from Maxim Group.

Congrats on all the good progress. I guess, first off, thinking about more of a housekeeping question. When thinking about your runway, does this factor in for potentially newly launching studies like the OCU410ST Phase II/III?

Yes, Michael. It's already budgeted.

All right. And then I guess in terms of the DME program, right? Do you have an idea of when we could expect to see data start to emerge from that Phase I? And then what sort of efficacy endpoints are being evaluated just given that it is a Phase I study?

I'll ask Huma to address...

Thank you for the question. Actually, we are looking at the safety and efficacy report of OCU200 towards the end of this year. And as we are assessing the safety of unilateral intravitreal administration of OCU200, we're also looking at the exploratory endpoints of BCVA and the dose response of OCU200. However, we are also looking at the secondary end points of OCU200 antibody formation and PK of OCU200 as well.

Okay. And then just one more for me and I'll hop back into the queue. Just -- for OCU500, right, I know this really hasn't been much of a core program lately, but just perhaps, have you heard anything regarding funding availability for that Phase I, just given that the recent uncertainty around funding we've heard at NIH?

Yes, Michael. The NIAID had meetings with us after our IND approval, and they're still stating they're on track to initiate the Phase I.

Our next question comes from the line of Swayampakula Ramakanth from H.C. Wainwright.

A couple of quick questions from me. So Shankar, you certainly have made an aggressive target for your team of filing 3 BLAs starting next year. So what gives you and your team confidence that you could achieve this? And as investors, what should we be watching out to see our progress towards this goal?

Yes. Good question. I mean investors need to look at our track record. We started most of the gene therapy programs getting into the clinic late '21, '22. And today, we are in the beginning of '25, and we have all 3 programs running from all cylinders. So our track record speaks for itself. And so the goal is, once again, thanks to FDA for allowing us to mark up the Phase III and ability to convert existing Phase II clinical trial into Phase II/III confirmatory clinical trial for BLA or Stargardt disease. It's a significant unmet medical need and that naturally lines up. I mean -- so we are estimating if we start the trial mid this year, about 9 months of recruitment. And then it's a 1-year follow-up that will put us into '27, and so that should be reasonably targeted for BLA. Similarly, getting into OCU410, we recently announced a month ago that our recruitment is completed in our Phase II clinical trial for OCU410 targeting geographic atrophy. So that means our Phase II will be completed by early next year. Our interim data which is coming out in the second half of this year will allow us to start having conversations and discussions with FDA as well as EMA on Phase III clinical design. So we are hopeful to initiate that next year. Once again, that will have a 1-year duration and GA is relatively easier to recruit compared to orphan diseases such as RP and Stargardt, and we are inundated with patients during our Phase II clinical trial where so many patients reaching out to us. Therefore, that gives us confidence we can complete that clinical trial, including recruitment. If you start in '26, we can relatively get it done by '28 and that can be lined up for BLA. And so that's why I think these time lines are reasonable. So starting next year, RP, retinitis pigmentosa OCU400, and 2027 is going to be OCU410ST Stargardt disease; and 2028, we're targeting BLA for OCU410 geographic atrophy.

Perfect. So we're just talking about 410 for GA. So we know that there are two approved therapies for this indication. So given that, how easy would it be to convince both physicians and patients to initiate therapy on OCU410 considering the price point difference?

Go ahead, Huma.

So I will -- RK, thank you for the question. I'll provide the clinical aspects and the price point, Shankar can provide the input. So in terms of one of the things I wanted to mention here is that we completed recruitment ahead of time for GA because there was a huge number of requests from the patients who have already got SYFOVRE and IZERVAY. In fact, they were on the waiting list, and we had a certain number to recruit for our Phase III. In terms of whatever the approved therapies right now are there, particularly with competitors, the first and the foremost in terms of the clinicians, the safety and tolerability profile of those products are concerning and 12% of the patients are progressing to the wet AMD. In terms of the safety and tolerability profile of OCU410, that gives us extreme confidence that there were no serious adverse events like [ CNV ] and ischemic optic neuropathy, endophthalmitis and vasculitis, which are the hallmarks of currently the approved products. Also, our protocol had included the washout period for those 2 approved products as well for a 3-month period. So in terms of recruitment and in terms of the safety and tolerability and efficacy profile, we are not only seeing differences or improvements in the structural as well as the functional outcomes. And in Europe, there is no approved product. So most -- majority of the physicians because of the compliance issues of 6 to 12 injections per year and safety considerations are not really prescribing and also the patients are reluctant to do that as you see the age being onset is 60 years of age and older. And in terms of the price point, I would let Shankar add his thoughts here.

Thank you, Huma. So RK, from the price point perspective, as we stated, U.S. itself has more than 1 million patients with a late dAMD, which is geographic atrophy. And most of these patients get potentially funded by CMS. So we need to start working with them. Obviously, as an organization, we are very mindful. We're watching other gene therapies, how they are getting priced. And unfortunately, in the marketplace, there are gene therapy products either to date, either they're targeting very complex diseases or they're going after ultra-rare diseases or they're going after diseases that already have a solution in the marketplace, which is not an unmet medical need. It's a -- using scientific platform, AAV vector to deliver something to replace like one-and-done instead of taking multiple injections of biologicals or certain treatments. So definitely, we need to consider all the price points. And when you have a huge population like this, number one, the pricing should be reasonable, and it's a one-and-done treatment. So even the patients are mostly in 60s or 70s, they still have many, many years of quality of life years remaining for them. So we'll do the appropriate pharmacoeconomic analysis, and we will price it fairly so that our goal is to make sure the payers can reimburse it, and the patients who really need the product, they get it. Our goal is to provide market access. We're going to work on every effort in our perspective to make sure our patients get our product who need them.

So last question from me on OCU400, with the Phase III program -- with the Phase III study in progress, what additional data should we expect from the Phase I/II study between now and filing of your BLA next year?

So as we have recently updated on our durability profile as well as safety. So safety will continue to be there. That's a commitment that we have made. So also on the efficacy functional end points, we will continue to report the parameters accordingly. LLVA and other functional parameters as they become available.

RK, the LLVA data, we recently announced at the 2-year durability that's important, not only from a payer perspective, too. So we'll definitely have 3-year data at the time of filing next year.

Our next question comes from the line of Robert LeBoyer from NOBLE Capital Markets.

Congratulations on all the progress. My question has to do with OCU500 and whether there will be any grant revenue to the company associated with the Phase I trial?

Yes. As we stated publicly, NIAID is sponsoring this program. And we have completed our obligations from company perspective. We are responsible for develop -- doing all the preclinical work and manufacturing and filing the IND, getting it approved and cleared for FDA and then transfer to them. So we've done our part, and they are supposed to fund the Phase I clinical program and take it to the next level.

Okay. Will the funding be recorded as revenue by the company? Or will this just be something where you turn it over to the agency as they run the trial?

Yes, we'll be turning over to the agency, they run the trial.

Our next question comes from the line of Daniil Gataulin from Chardan.

Congrats on all the progress. A couple of questions on OCU410ST. First, what is your manufacturing strategy for OCU410ST? And do you plan on using the commercial-grade product for the Phase II/III study?

Good question, Daniil. We already made at a commercial scale introduced into our Phase I and the same scale will be used for Phase II/III. We'll follow the similar pattern like we are doing for RP. For RP, we're introducing 2 commercial scale lots in our pivotal trial. We'll do the same thing for ST program, which is consistent and the FDA agreed with our strategy, and we're moving forward with that.

Okay. Got it. And in terms of the sites for this study, are you looking at both the U.S. and ex U.S. sites? And what proportion of each if you're using both?

There is no ex U.S. sites, except for Canada, of course. I mean we do have sites set up in Canada for retinitis pigmentosa. If necessary, we'll activate the sites for Stargardt. But based on the patient population, we only need 51 patients. I think Huma and her team are comfortable that they can get those patients in the U.S. very quickly.

This concludes the Q&A portion. I will now turn the call back over to Chairman, CEO and Co-Founder, Dr. Shankar Musunuri.

Thank you, operator. We appreciate the continued interest and involvement of our key stakeholders as we move forward transformative initiatives. We look forward to a year of significant catalysis, ahead as we establish Ocugen as the pioneering biotechnology leader in gene therapies for blindness diseases. Have a great day.